Cap Gemini - Registration Document 2016

FINANCIAL INFORMATION

4.2 Consolidated financial statements

market risks Treasury shares and management of share capital and purposes and does not have any interests in listed companies. The Group does not hold any shares for financial investment consolidated equity in the amount of €247 million. These consist At December 31, 2016, treasury shares were deducted from American activities. and the contractual holding system for key employees of of the liquidity agreement (the associated liquidity line is €9 million) program and (ii) 270,910 shares in respect of the implementation of (i) 2,879,357 shares purchased under the share buyback share price do not impact the Consolidated Income Statement. value of treasury shares is deducted from equity, changes in the not therefore exposed to significant equity risk. Finally, as the In view of the small number of treasury shares held, the Group is The Group’s capital management strategy is designed to maintain commitments). At December 31, 2016, and following the performance indicator (see Note 29, Off-balance sheet evidenced by the use of the debt-to-equity ratio as a key shareholders, while adopting a prudent approach to debt as development of its business activities and delivering a return to a strong capital base in view of supporting the continued shares, buy back its own shares, adjust the dividend paid to best manage the structure of its capital, the Group can issue new (compared with €1,767 million at December 31, 2015). In order to acquisition of IGATE, the Group had net debt* of €1,413 million shares. shareholders or enter into derivative instruments on its own equivalents), Cap Gemini S.A. exercised in full the call option on its November 21, 2016 (see Note 21 – Net debt / Net cash and cash early redemption of the ORNANE bonds outstanding at Cap Gemini S.A. shares to a bank counterparty. Following the It is recalled that in October 2013, the Group sold a call option on recognized an amount of €14 million in equity at December 31, by the Company was also exercised in full. Cap Gemini S.A. own shares purchased on October 18, 2013. The call option sold 2016 in respect of the unwinding of these transactions. than the euro accounts of subsidiaries with a functional currency other Currency risk and translation gains and losses on the US dollar and the pound sterling against the euro, generating a statements are particularly impacted by fluctuations in the accounts of consolidated subsidiaries, the consolidated financial Regarding risks arising on the translation of the foreign currency appreciation of the US dollar partially offset by the depreciation of positive impact on translation reserves, mainly due to the the pound sterling against the euro in 2016. Note 2, Consolidation principles and Group Structure. for the preparation of the financial statements are presented in functional currency is not the euro. The main exchange rates used foreign currency accounts of consolidated subsidiaries whose The Group does not hedge risks arising on the translation of the

held by beneficiaries for Capgemini Performance Units (PUs): Capgemini exchanged IGATE Performance Share Awards (PSA) On July 1, 2015, in the context of the IGATE acquisition, the number of PUs granted was calculated by multiplying the ◗ number of IGATE PSAs outstanding by the following ratio:

US$ 48 (unit purchase price of IGATE shares paid by Capgemini) €78.37 x

(€/US$ 1.0824

on April 24, 2015) Gemini S.A. (closing price of the Cap

on April 24, 2015)) exchange rate

US$ on April 24, 2015; the exchange parity of the IGATE and Cap Gemini S.A. shares in this calculation is equivalent to adjusting the number of PSAs by ◗ beneficiary in the Group at the vesting date: market performance conditions and the presence of the the vesting of PUs is subject to the attainment of internal and ◗ organic free cash flow (OFCF)* objective for the period 2015 the internal performance condition consists of a cumulative ❚ maximum number of units vesting for an aggregate amount of Cash Flows for fiscal years 2015, 2016 and 2017, with the of €2 billion, (*) to 2017, as presented in the audited, published Statements Infosys, Sopra, and Cognizant; equal weighting: Accenture, CSC, Atos, Tieti, CGI Group, comprising the CAC 40 index and the following companies in the Cap Gemini share to outperform a reference basket the market performance condition is based on the ability of ❚ the vesting schedule is as follows: ◗ 25% of PUs on July 1, 2016, subject to presence and market ❚ performance conditions, performance conditions, 25% of PUs on July 1, 2017, subject to presence and market ❚ performance conditions, 25% of PUs on July 1, 2018, subject to presence and market ❚ performance conditions; 25% of PUs on July 1, 2019, subject to presence and internal ❚ S.A. share price between the vesting dates and July 1, 2019. final adjustment clause tied to the change in the Cap Gemini in addition, PUs vesting in the first three years are subject to a ◗ 13,118 PUs for this first tranche. date, resulting in the vesting of 15,400 PUs and the cancellation of The internal condition was only satisfied 54% at the first vesting

4

debt / Net cash and cash equivalents and Note 22, Cash flows., The alternative performance measures monitored by the Group (organic free cash flow and net debt) are defined in Note 3, Alternative performance measures, and broken down in Note 21, Net (*)

195

Registration Document 2016 — Capgemini